On September 28, 2015 ten members of the Canadian Securities Administrators (CSA members), including the Ontario Securities Commission, released Multilateral Staff Notice 58-307 (Staff Notice) entitled Staff Review of Women on Boards and in Executive Officer Positions – Compliance with National Instrument 58-101 Disclosure of Corporate Governance Practices (NI 58-101).  The Staff Notice summarizes the findings of the review by the CSA members of the corporate governance disclosure of 722 reporting issuers being, of the 886 reporting issuers on the TSX, those that had published their disclosure by July 31, 2015.  Highlights of the results of the review are set out below:

Female Representation

The CSA members’ review found that, of the sampled issuers:

  • 49% have at least one woman on their board;
  • 60% have at least one woman in an executive officer position; and
  • 15% have added one or more women to their board this year.

Of the sampled issuers with a market capitalization above $2 billion:

  • 60% have two or more female directors; and
  • over 30% have adopted a written policy for identifying and nominating women directors.

Term Limits

With respect to the disclosure of whether issuers have adopted director term limits or other mechanisms of board renewal, of the sampled issuers:

  • 19% have adopted director term limits; and
  • 56% have adopted other mechanisms of board renewal.

The most commonly cited mechanism of board renewal was some form of annual board assessment.

Gender Diversity Policy

With respect to the disclosure of whether the issuer has a written policy relating to the identification and nomination of women, of the sampled issuers:

  • 14% disclosed the adoption of a clear written policy for identifying and nominating women directors;
  • 65% disclosed that they had decided not to adopt a written policy; and
  • 11% disclosed a general diversity policy without specific provisions for the identification and nomination of women directors which may not meet the requirements of NI 58-101.

Of the sampled issuers who have adopted a written policy for identifying and nominating women directors:

  • 48% disclosed that the policies were adopted or updated this year;
  • 98% disclosed that gender was specifically considered when making board selections; and
  • 47% set specific quotas or targets for female directors.

The results of the CSA members’ review did not vary significantly by region. Industry and size of the issuer were the most significant indicators of whether issuers adopted initiatives to increase the representation of women on their board or in executive officer positions. Insurance, utility, communications and entertainment industries had the highest policy adoption rates at roughly 30%, while oil and gas, technology, biotech, hospitality and environmental industries had the lowest rates, at less than 10%.

The Staff Notice provides guidance aimed at improving issuer disclosure in order to further the goal of increasing transparency for investors and other stakeholders regarding the representation of women on boards and in executive officer positions. It also addresses disclosure practices regarding board term limit or other mechanisms of board renewal and provides examples of how these disclosure requirements may be met.